Freddie Mac previously restricted the eligibility of Texas Equity Section 50(a)(6) Mortgages to fixed-rate loans, but certain ARMs are now allowed per Freddie Mac Selling Guide Section 4301.7:
“A Texas Equity Section 50(a)(6) Mortgage must be a conventional First Lien Mortgage that is a:
- 15-, 20- or 30-year fixed-rate Mortgage, or
- 1/1, 3/1, 5/1, 7/1 or 10/1 ARM”
Texas Home Equity ARM Note and Rider Updates
Print conditions for the following Texas Home Equity adjustable rate Notes and Riders have been modified to trigger for applicable 1/1, 3/1, 5/1, 7/1, and 10/1 Freddie Mac programs when “Is this a Texas Home Equity Section 50(a)(6) loan?” (FI 29932) is set to “Yes”:
- TX Home Equity 3522.44 Fixed/Adj. 1 Year Treasury Note (Cx7859)
- TX Home Equity 3182.44 Fixed/Adj. 1 Year Treasury Rider (Cx7862)
- TX Home Equity 3528.44 LIBOR Fixed/ARM Note (Cx6177)
- TX Home Equity 3187.44 LIBOR Fixed/ARM Rider (Cx6181)
These four documents will continue to only print for corresponding 5/1, 7/1, and 10/1 Fannie Mae Texas Home Equity programs. No other indices or convertible ARM programs are offered by Freddie Mac for Texas Home Equity 50(a)(6) loans.
Texas Home Equity ARM Data Integrity Error Updates
The existing Texas Home Equity ARM data integrity check Error in ConformX has been modified to allow Freddie Mac ARMs through that trigger one of the Note and Rider sets above. The following ERROR message will display if “Documents to Use” (FI 27242) is set to “Freddie Mac” and Texas Home Equity documents are not supported for the loan data:
ConformX does not support Texas Home Equity Section 50 (a)(6) loan documents for this type of ARM loan. In general, only ARM Notes/Riders as posted by FNMA/FHLMC are supported for TX Home Equity loans.
Non-Freddie Mac Texas Home Equity loans will continue to be allowed through for supported 5/1, 7/1, and 10/1 ARM programs, just as they were previously.
Non-Texas Home Equity ARM Note and Rider Updates
The following Freddie Mac ARM documents are now set to only print when “Is this a Texas Home Equity Section 50(a)(6) loan?” is set to “No”, so only the appropriate Texas Home Equity Note and Rider will print:
- 5510 Freddie Mac 1 YR Treasury AIP (Cx4136)
- 5110 Freddie Mac Rider 1 YR Treasury AIP (Cx4153)
- 5530 Freddie Mac 1 YR LIBOR ALL (Cx4150)
- 5130 Freddie Mac Rider1 YR LIBOR ALL (Cx4154)
- 5531 1 Yr. LIBOR ARM Note (Cx3439)
- 5131 1 Yr. LIBOR ARM Rider (Cx3441)
The data integrity check changes are currently available on ConformX Stage for testing purposes and will be moved to ConformX Production November 9, 2018. All corresponding document edits are already in place. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.